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Financial Discrimination for Low-wage Workers in Los Angeles

September 8, 2009

Low-wage workers in Los Angeles, California are routinely paid less than minimum wage, denied overtime compensation and access to workman's compensation, a recent study revealed. The survey uncovered systematic violations of employment and labor laws in low-wage industries throughout Los Angeles, Chicago and New York.

The study, "Broken Laws, Unprotected Workers," was released last week and surveyed over 4,000 low-wages workers in 2008, exposing serious financial discrimination as well as violations of the very rights most Americans take for granted--the right to receive minimum wage, overtime compensation, health and safety protection in the workplace, and the right to be treated fairly.

Funded by the Joyce, Haynes, Ford, and Russell Sage foundations, the mission of the survey was to obtain statistically accurate estimates of violations in low-wage industries often overlooked by standard surveys--reaching the "front-line" workers who cover a population of around 1.64 million workers, or fifteen percent of the workforce in Los Angeles, Chicago and New York.

The survey was based on interviews with 4,387 workers in a wide variety of low-wage industries including apparel manufacturing, private households, construction, food service, car washes, and childcare. Thirty-nine percent of the workers were illegal immigrants, thirty percent were U.S. born citizens, and thirty-one percent were legal immigrants.

According to the surprising results, sixty-eight percent of workers experienced at least one pay-related violation in the previous workweek. The average worker in a low-wage industry, who earns $339 per week, is reportedly robbed of $51 each week by employers committing wage violations. Assuming a full-time, full-year work schedule, the low-wage worker estimates a loss of $2,634 a year--a theft of wages equaling fifteen percent.

Labor Secretary Hilda L. Solis discussed the findings with the New York Times, stating that this disregard of federal labor standards was inexcusable--that these laws are, "designed to protect the neediest among us." Solis is staffing over 250 additional investigators to get to the bottom of the wage-and-hour issue. She claimed that the Department of Labor will not rest until employers follow the law, and each worker is compensated and treated fairly.

The report reveals a magnitude of wage violations--employers paying less than minimum wage, demanding off-the-clock-work, refusing payment for overtime hours, and persuading employees not to file for workman's compensation.

  • In California, Illinois and New York, workers are required to receive documentation of their earnings used to verify the legality and accuracy of payment. The study found that fifty-seven percent of workers had not received mandatory pay documents.
  • Only eight percent of workers who were seriously injured in the workplace filed for compensation to receive medical treatment. One-third of the injured paid for the healthcare bills themselves to avoid getting fired, whereas twenty-three percent used insurance.
  • Over a quarter of workers who worked more than forty hours weren't compensated for the time during the previous week. Of these, seventy-six percent of workers were not paid the legally required rate by their employers. Over two-thirds of workers were forced to work through their legally entitled lunch breaks.
  • Twelve percent of workers who received tips, claimed that employers or supervisors had stolen their tips, which is illegal.
  • Only one in five workers reported complaints to employers last year, and of these, forty-three percent experienced one or more forms of illegal retaliation as a result--firing, suspension, or threats to call immigration. Another twenty percent of workers who experienced dangerous working conditions or wage violations reported that they did not issue complaints out of fear of losing their job.
  • Women were much more likely, according to the report, to endure a minimum wage violation than men, with female illegal immigrants at the highest rate. African-American workers born in the United States had a violation rate that tripled that of whites.

Annette Bernhart, an author of the study and policy co-director of the National Employment Law Project estimated on NPR that in a given week, around 1.1 million workers in the three major cities experience at least one violation with payment. That estimates nearly $56 million of lost wages in one week. This income is lost--money stolen from families, communities, and government. "This problem is not going away," Bernhard said, "if anything, we think it's just going to escalate"

The authors of the study advise that the best solution for preventing workplace violation is to educate workers about workplace rights, to make sure the workers have access to legal resources, to improve government monitoring of the workplace, and encourage workers not to have fear over employer retaliation--a sound plan for legal immigrants and U.S. residents, however difficult for illegal immigrants. The authors stated that any policy initiative aimed to reform workplace violations must also place national immigration reform at the top of the list, ensuring equal protection with the enforcement of employment and labor laws.

This study was published by the Institute for Research on Labor and Employment at the University of California at Los Angeles, the National Employment Law Project, and the Center for Urban Economic Development at the University of Illinois at Chicago.

Low-Wage Workers Are Often Cheated, Study Says, New York Times, September 1, 2009

Solis Pledges Employment Law Crackdown,, September 2, 3009

How the Lowest Paid Workers Get Ripped Off, U.S. News and World Report, September 3, 2009

Low-Wage Workers Suffer Financial Discrimination, NPR, September 3, 2009

Working Without Laws, The Nation/NPR, September 8, 2009

Related Web Resources:

U.S. Department of Labor


If you or someone you know in Los Angeles, Orange County, or throughout Southern California has experienced violations of employment and labor laws, our Anaheim-based team of experienced attorneys and professionals can help. From hour and wage cases, to overtime compensation, health and safety protection in the workplace, and the right to be treated fairly--our attorneys at Howard Law PC will fight for your rights. To set up a free meeting, please contact us online or call toll-free at 1-800-872-5925.